China expresses some … um … “concern” about whether or not it will ever see its money back:
The Chinese prime minister, Wen Jiabao, expressed unusually blunt concern on Friday about the safety of China’s $1 trillion investment in American government debt, the world’s largest such holding, and urged the Obama administration to provide assurances that the securities would maintain their value in the face of a global financial crisis.
Speaking ahead of a meeting of finance ministers and bankers this weekend in London to lay the groundwork for next month’s G20 summit, Mr. Wen said he was “worried” about China’s holdings of United States Treasury bonds and other debt, and that China was watching economic developments in the United States closely.
“President Obama and his new government have adopted a series of measures to deal with the financial crisis. We have expectations as to the effects of these measures,” Mr. Wen said. “We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.”
Just a little? There’s an old saying to the effect of “if you owe the bank $1 Million, then the bank owns you; if you owe the bank $1 Trillion, then you own the bank.” China’s feeling pretty nervous because it knows it can’t sell its holdings except at a tremendous loss — both from the normal discount expected, and from the fact that it is by far the largest mover in the market (e.g. what do you think would happen to Microsoft stock if Bill Gates started selling off?) — and it doesn’t see a whole lot coming out of Washington to instill confidence.
But there’s no need to fret PM Jiabao! Unnamed economists are here to save the day:
While economists dismissed the possibility of the United States defaulting on its obligations, they said China could face steep losses in the event of a sharp rise in United States interest rates or a plunge in the value of the dollar.
Whew! That was close. Nothing but a little market risk to worry about there, Jiabao. Default? Pffft … never gonna happen.
Back in the land called “reality” however, default is plays a bigger part since, aside from reneging on the debt, there are only three other ways for the government to pay for its spending binge: higher taxes, printing more money, or borrowing. Higher taxes impedes growth and leads to less revenue. Printing money leads to hyper-inflation. So, even though those two choices will be used to a certain extent, further borrowing is the only viable alternative to default. But who’s going to lend to us?
The bulk of China’s investment in the United States consists of bonds issued by the Treasury and government-sponsored enterprises and purchased by the State Administration of Foreign Exchange, which is part of the People’s Bank of China … much of the Treasury debt China purchased in recent years carries a low interest rate, and would plunge in value if interest rates were to rise sharply in the United States. Some financial experts have warned that measures taken to combat the financial crisis — running large budget deficits and expanding the money supply — may eventually create price inflation, which would lead to higher interest rates.
This puts the Chinese government in a difficult position. The smaller the United States stimulus, the less its borrowing, which could help prevent interest rates from rising. But less government spending in the United States could also mean a slower recovery for the American economy and reduced American demand for Chinese goods.
It may just be the case that China’s best option is to support its investment by propping up its best customer with yet more loans. Unfortunately, that means that Washington will have little incentive to slow down spending (since it owns the bank). The nasty little cycle of borrowing > spending > inflation > rising interest rates > falling dollar, will continue necessitating even more borrowing. China, in turn, will have serious questions about the value of its investment, and the US will start having serious discussions about declaring a default.
In short, China’s not just “worried” about the current fiscal mess. It’s crapping its collectivist shorts.
President Obama and VP Biden are going to be watching you:
Obama and Biden both gave stern warnings yesterday about misuse of stimulus funds. “If we see money being misspent, we’re going to put a stop to it,” Obama told a gathering of state officials at the White House. How? Obama says “we will call it out and we will publicize it.” Biden, meanwhile, scolded: “If we don’t get this right, folks, this is the end of the opportunity to convince Congress that anything should go to the states.”
Of course, these were words spoken to representatives of states getting “stimulus” money.
Lost in the shuffle is the fact that there is no one to shout “BS” to the whole scheme and declare it all “misspent” money. A $787 billion dollar social spending scheme isn’t money “misspent?” Hah!
But other than that, I think Earl Devaney provides us with the ground truth about this upcoming spending debacle:
The chief watchdog for spending from the $787 billion stimulus package says it’s guaranteed there will be waste and fraud.
Earl Devaney, tapped by President Obama to track the giant spending plan, also said it will be at least a year before the government gets recovery.gov, the Web site the administration has touted as a key part of its transparency, up and running properly.
“I’m afraid that there may be a naive impression that given the amount of transparency and accountability called for by this act, no or little fraud will occur.
A “naive impression?”
Heh … nah, you don’t say?
The word “naive” seems to describe a lot of what is going on right now with the Obama administration.
Or perhaps a better way to say that is this is a typical reason Democrats aren’t well thought of, for the most part, by the military community:
Several veterans groups “are lashing out” at the Obama administration over a policy proposal they say would “dramatically alter” how the Department of Veterans Affairs handles health insurance claims for veterans, The Hill reports. Under the policy, which is included in President Obama’s fiscal year 2010 budget proposal, VA would bill health insurers for treatment of injuries and conditions sustained as a result of veterans’ military service. Currently, VA covers those costs and bills health insurers only for treatment for conditions unrelated to veterans’ military service.
The “you got it, you pay for it” method of saving money on the back of wounded vets. This after all the rhetoric and promises about taking better care of our veterans than ever before because they’ve “earned it”?
Of course, as soon as this trial balloon is discovered, the mealy mouth nonsense begins:
According to OMB spokesperson Tom Gavin, although concerns about policy changes in coverage are understandable, no official proposal is on the table. He said, “The details of the VA budget are being worked out right now and the details won’t be available until April,” adding, “The administration is committed to providing the VA with substantial resources to provide for our veterans” (Tiron, The Hill, 3/9).
And, of course, with the federal government spending money on social issues disguised as “stimulus”, followed by a porked up spending bill and now an almost 4 trillion dollar budget, where is the one place that they decide they should try and save money?
On the backs of wounded vets.
Sorry, but that cost was prepaid by the terms of their service and wounds. But obviously, more interested in social issues within the military than keeping promises, the administration begins the ground work for backing out on another of its promises (to their credit, some Democrats, such as Sen. Patty Murray (D-WA), have declared such a proposal would be “dead on arrival” should it make it into the budget – a tip of the hat to her).
Courtesy my meager Photoshop skills:
*** Update 6:20 PM Central Daylight Time ***
Unfortunately, the sign is already obsolete.
A group of economists asked to assess the efforts of both Obama and Geithner were none too impressed:
U.S. President Barack Obama and Treasury Secretary Timothy Geithner received failing grades for their efforts to revive the economy from participants in the latest Wall Street Journal forecasting survey.
The economists’ assessment stands in stark contrast with Mr. Obama’s popularity with the public, with a recent Wall Street Journal/NBC poll giving him a 60% approval rating. A majority of the 49 economists polled said they were dissatisfied with the administration’s economic policies.
On average, they gave the president a grade of 59 out of 100, and although there was a broad range of marks, 42% of respondents rated Mr. Obama below 60. Mr. Geithner received an average grade of 51. Federal Reserve Chairman Ben Bernanke scored better, with an average 71.
The big criticism has to do with “overpromising and underdelivering”:
[E]conomists’ main criticism of the Obama team centered on delays in enacting key parts of plans to rescue banks. “They overpromised and underdelivered,” said Stephen Stanley of RBS Greenwich Capital. “Secretary Geithner scheduled a big speech and came out with just a vague blueprint. The uncertainty is hanging over everyone’s head.”
The Hill reports that lack of progress is starting to really concern some Democrats in Congress:
Members of Congress and old political hands say [Obama] needs to show substantial progress reviving the economy soon.
Some Democrats have started to worry that voters don’t and won’t understand the link between economic revival and Obama’s huge agenda, which includes saving the banking industry, ending home foreclosures, reforming healthcare and developing a national energy policy, among much else.
While lawmakers debate controversial proposals contained in the new president’s debut budget — cutting farm subsidies, raising taxes on charitable contributions, etc. — there is a growing sense that time is running out faster than expected.
Democrats from states racked by recession say Obama needs to produce an uptick by August or face unpleasant consequences. Others say that there is more time, but that voters need to see improvement by the middle of next year.
The most optimistic say Obama and Democrats in Congress will face a political backlash unless the economy improves by Election Day 2010.
Of course, as mentioned previously, it becomes increasingly clear that he, Geithner and others really don’t know what to do about all of this. And careful and objective analysis of the money promised in both the bailout and stimulus see the former not accomplishing the bailout hoped for and the latter not being at all properly targeted to stimulate the job creating, wealth producing private sector.
And Democrats are right – the sausage making legislative process is of little interest to most Americans, especially those in trouble. They want results and they want them now. He promised to fix it and now they are going to expect results. There was no reality in his promises so it is rather difficult to understand why the American public which elected him should suddenly understand the reality of the situation. He promised, they took him up on it, now he has to deliver.
That’s the downside of actually winning after making a raft of promises that reality won’t let you keep.
This is just pathetic:
President Barack Obama signed a $410 billion spending bill Wednesday that includes thousands of pet projects inserted by lawmakers, even as he unveiled new rules to restrict such so-called earmarks.
At the same time, after Democrats criticized former President George W. Bush’s signing statements, Mr. Obama issued one of his own, declaring five provisions in the spending bill to be unconstitutional and nonbinding, including one aimed at preventing punishment of whistleblowers.
Presidents have employed signing statements to reject provisions of a bill without vetoing the entire legislation. Democrats and some Republicans have complained that Mr. Bush abused such statements by declaring that he would ignore congressional intent on more than 1,200 sections of bills, easily a record. Mr. Obama has ordered a review of his predecessor’s signing statements and said he would rein in the practice.
“We’re having a repeat of what Democrats bitterly complained about under President Bush,” said Sen. Arlen Specter (R., Pa.), who drafted legislation to nullify Mr. Bush’s signing statements.
The president said the spending measure should “mark an end to the old way of doing business.” His proposals, seconded by the House Democratic leadership, followed days of attacks by Republicans — and some Democrats — over the spending for local projects tucked into the bill.
This is an example of what I was talking about yesterday when I said Obama’s first 50 days was marked by a total lack of leadership.
Here was a chance to lead. After railing on the campaign trail against earmarks and wasteful spending, he signs a bill full of earmarks and wasteful spending and then, like a mom who yells, “boys, quit it” but never moves to enforce her words, Obama says “this should end the old way of doing business”. Really?
What’s the penalty? Another lecture after the signature? Had Obama vetoed the bill, he’d have sent the strong message necessary that his assumption of the presidency marked the end of “business as usual”. Instead he caved and created a fiction that this was the “old administration’s” business and therefore exempt from his pledge.
Talk about BS on a stick. If a president signs something into law his watch, it is his and not anyone else’s. To pretend anyone would actually believe that glib nonsense is incredible. But much of the MSM dutifully reported it as such.
He also pushed the fiction that if this bill wasn’t signed, the government would shut down. No it wouldn’t. Congress simply passes a continuing resolution which funds government at last year’s levels. But that’s not what he or Congress wanted. They wanted the 9,000 earmarks and the 8% increase in spending as well – thus the fiction about it being both necessary and last year’s business.
Then to put the proverbial cherry on the dissembling rhetorical sundae, Obama issues his own signing statement after making a press event about dissing Bush’s use of them.
The Drug War along the Mexican-US border is getting some high level consideration:
President Obama weighed in Wednesday on the escalating drug war on the U.S.-Mexico border, saying that he was looking at possibly deploying National Guard troops to contain the violence but ruled out any immediate military move.
“We’re going to examine whether and if National Guard deployments would make sense and under what circumstances they would make sense,” Obama said during an interview with journalists for regional papers, including a McClatchy reporter.
“I don’t have a particular tipping point in mind,” he said. “I think it’s unacceptable if you’ve got drug gangs crossing our borders and killing U.S. citizens.”
Already this year there have been 1,000 people killed in Mexico along the border, following 2008’s death toll of 5,800, according to federal officials who credit Mexican President Felipe Calderon for a crackdown on drug cartels.
But the spillover on the border — for example, to El Paso from neighboring Ciudad Juarez — has created a political reaction.
In a recent visit to El Paso, Texas Gov. Rick Perry called for 1,000 troops to protect the border.
Obama was cautious, however. “We’ve got a very big border with Mexico,” he said. “I’m not interested in militarizing the border.”
I agree with his point about not “militarizing the border”. And I certainly understand the desire to send in help to quell and control the violence that spills over the border. But my question is, how will the troops be mobilized? The only way Obama can send in National Guard troops as I understand it is by federalizing them. Then it becomes a matter of their role. The Posse Comitatus act prevents federal troops from being used in a law enforcement role except on federal property (like Washington DC). So he’s limited in the role to which he can commit any troops even if he wanted too.
It would seem instead, that perhaps the best way to proceed in this case, if the desire is to send NG troops to the border to help in law enforcement, is for the Governors to mobilize and send them while letting active military lend logistical, intel and perhaps advisory support. But unless they’re sent in a war-fighting mode, there isn’t much of a role for federal troops in this case.
UPDATE: Commenter Jay Evans notes a recent change in the law which may effect this (the John Warner National Defense Authorization Act for Fiscal Year 2007 (H.R. 5122)):
SEC. 1076. USE OF THE ARMED FORCES IN MAJOR PUBLIC EMERGENCIES. (a) USE OF THE ARMED FORCES AUTHORIZED.— (1) IN GENERAL.—Section 333 of title 10, United States Code, is amended to read as follows: ‘‘§ 333. Major public emergencies; interference with State and Federal law ‘‘(a) USE OF ARMED FORCES IN MAJOR PUBLIC EMERGENCIES.— (1) The President may employ the armed forces, including the National Guard in Federal service, to— ‘‘(A) restore public order and enforce the laws of the United States when, as a result of a natural disaster, epidemic, or other serious public health emergency, terrorist attack or incident, or other condition in any State or possession of the United States, the President determines that— ‘‘(i) domestic violence has occurred to such an extent that the constituted authorities of the State or possession are incapable of maintaining public order; and ‘‘(ii) such violence results in a condition described in paragraph (2); or ‘‘(B) suppress, in a State, any insurrection, domestic violence, unlawful combination, or conspiracy if such insurrection, violation, combination, or conspiracy results in a condition described in paragraph (2). ‘‘(2) A condition described in this paragraph is a condition that— ‘‘(A) so hinders the execution of the laws of a State or possession, as applicable, and of the United States within that State or possession, that any part or class of its people is deprived of a right, privilege, immunity, or protection named in the Constitution and secured by law, and the constituted authorities of that State or possession are unable, fail, or refuse to protect that right, privilege, or immunity, or to give that protection; or
‘‘(B) opposes or obstructs the execution of the laws of the United States or impedes the course of justice under those laws.
‘‘(3) In any situation covered by paragraph (1)(B), the State shall be considered to have denied the equal protection of the laws secured by the Constitution.
‘‘(b) NOTICE TO CONGRESS.—The President shall notify Congress of the determination to exercise the authority in subsection (a)(1)(A) as soon as practicable after the determination and every 14 days thereafter during the duration of the exercise of that authority.’’.
(2) PROCLAMATION TO DISPERSE.—Section 334 of such title is amended by inserting ‘‘or those obstructing the enforcement of the laws’’ after ‘‘insurgents’’.
It looks like it now depends on the classification of the problem.
Alan Greenspan has a piece in the Wall Street Journal today which essentially casts him as the Pontius Pilate of the financial crisis. Or, to sum it up rather sucinctly, “it wasn’t my fault”. You’re welcome to read through it and agree or disagree. However, the imporant point I think that should be taken from the Greenspan piece are the last two paragraphs:
Any new regulations should improve the ability of financial institutions to effectively direct a nation’s savings into the most productive capital investments. Much regulation fails that test, and is often costly and counterproductive. Adequate capital and collateral requirements can address the weaknesses that the crisis has unearthed. Such requirements will not be overly intrusive, and thus will not interfere unduly in private-sector business decisions.
If we are to retain a dynamic world economy capable of producing prosperity and future sustainable growth, we cannot rely on governments to intermediate saving and investment flows. Our challenge in the months ahead will be to install a regulatory regime that will ensure responsible risk management on the part of financial institutions, while encouraging them to continue taking the risks necessary and inherent in any successful market economy.
Those words reminded me of the quote I saw in business columnist Tom Oliver’s piece today in the Atlanta Journal Constitution:
“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” — F.A. Hayek
Any columnist who starts with a Hayek quote is guaranteed to get my attention. And I’ve come to enjoy Oliver’s columns. However, reviewing Greenspan’s advice and admonitions in those two paragraphs, juxtaposed against the simple and elegant truth of Hayek’s statement you find yourself back in the outback watching that big red kangaroo headed for a collision with the car. It is inevitable, there’s nothing you can do about it, they can’t or won’t hear your warnings and all you can do is watch – and cringe.
Frankly, as we watch the machinations of government and listen to their declarations, we have begun to understand that for the most part, those in charge of all of this haven’t a clue. As Oliver states:
Far from demonstrating the demise of free enterprise, this long-running, deepening recession is revealing the limitations of government.
Government, in its various yet powerful incarnations, has been offering one fix after another since August 2007.
The more the Fed and Treasury have tried, the less sure they seem and the more nervous the money makers have become.
It’s understandable that folks would look to the new administration for new ideas. So it’s harder than usual to acknowledge that the ideas are in fact pretty old and, having been tried, found wanting.
Whatever one may think about the so-called stimulus, it’s too easily deconstructed as pork and policy initiatives.
And if it’s still debatable whether to nationalize the financial industry, the move to nationalize health care, education and energy can hardly be disguised as economic recovery programs.
It is understandable that those who derive their power from government would use this recession as an excuse to further government’s reach. But they act as if government has been absent — as if they’ve been absent — from the role of regulator and legislator.
He’s precisely right – it wasn’t a problem with lack of regulation or lack of legislation. It was a lack of proper regulatory oversight and a willful decision by legislators to ignore the building crisis coupled with government distorting the market and actually incentivizing risk taking far beyond that which is prudent that led us here. And now that they have us in this position, all of them, Greenspan included, are engaged in a flurry of finger-pointing and name calling at every one but the right ones. This wasn’t a crisis which happened in just the last 6 months or 8 years. This one has been building for a while.
“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” — F.A. Hayek
We had Democrats in charge and then we had Republicans. Again and again.
Both endorsed and encouraged the subprime sleight-of-hand. Both appointed heads of the regulatory agencies that could’ve stopped the poison seeping through our banks’ balance sheets. Both allowed gamblers to hedge and swap derivatives on top of derivatives that no one can explain and that are proving far more debilitating than the debacle they were insuring against.
Freddie Mac and Fannie Mae became toxic assets of the government while doing the bidding of congressmen who now act like the piano players in a brothel.
The Federal Reserve proved to be anything but reserved, instead stoking a fire that burned us all.
These were not the result of idle hands of government, but rather deliberate deeds that created false markets with inflated credit while turning a blind eye to those who finance election results.
Oliver’s characterizations are dead on – and he’s nailed both the fed and the Congress. The most irritating thing to me about this whole mess, other than the obvious huge loss of wealth, is the success those who were responsible for writing the rules, laying out the playing field and calling the game are escaping both blame and punishment for what they’ve brought about. That toad Barney Frank having the chutzpa to talk about prosecuting those who were guilty of getting us in this mess still astounds me. If anyone should be undergoing such prosecution right now, it is he and numerous other congressmen and women, both past and present.
Oliver concludes as follows and I can’t help but say a hearty “amen” to what he has to say:
We periodically recoil in horror at government’s failure to protect foster children or care for veterans or the mentally ill. But then we turn around and assume government will perform better in areas more complicated.
Why does the failure of government so often lead so many to believe we need more government?
Like the hair of the dog for the alcoholic, it may calm the trembling hands for a moment but it inevitably leads to another spree and another hangover.
We’re headed into a “or worse” moment. No one in government is going to listen to Alan Greenspan’s admonitions or believe Tom Oliver’s brief accounting of the history of this crisis. Instead we’re going to see precisely the opposite happen – more regulation, more strings, more intrusion, more control. And, as Hayek said, we’ll again see “how little [men] really know about what they imagine they can design.”
Because the Secretary General has it – and demonstrates again why we ought to let the Third World Debating Club on the Hudson find a new home:
A day after his White House meeting with President Barack Obama, U.N. Secretary-General Ban Ki-moon called the United States a “deadbeat” donor to the world body while making the made the rounds on Capitol Hill.
“He used the word ‘deadbeat’ when it came to characterizing the United States. I take great umbrage (over) that,” Ileana Ros-Lehtinen, the panel’s senior Republican, said after an hour-long, closed-door meeting. “We certainly contribute a whole lot of U.S. taxpayer dollars to that organization. We do not deserve such a phrase.
Interviewed after the session, Ban said he had wanted to draw attention to the fact that the U.S. agrees to pay 22 percent of the U.N.’s $4.86 billion operating budget, but is perennially late with its dues — and now is about $1 billion behind on its payments.
That figure is “soon to be $1.6 billion,” Ban emphasized. Asked if he’d used the word ‘deadbeat’ during the meeting, he replied, “Yes, I did — I did,” then laughed mischievously.
The ultimate deadbeat institution which can, unsurprisingly, find more ways to waste money than the US government, calls the country that pays 22% of its cost and host to the parasites that represent their backwater potentates the “deadbeat” ?
Ban certainly demonstrates a lot of respect for the country and the new administration doesn’t he? So far this new relationship with the world is going swimmingly, as the UK can attest.
But there’s a glimmer of hope apparently. Ban has given Obama some budget advice:
Obama seeks a 9.5 percent increase in international affairs spending, which Yeo said would be enough to cover not only next year’s U.S. dues to the U.N., but also $1 billion in arrears.
Amazing. And we’ll end up handing it all over, just watch.
Both Camille Paglia and Howard Fineman give an assessement (although not presented as a 50 day assessment).
Paglia says, “free Obama from his advisors“:
Yes, free the president from his flacks, fixers and goons — his posse of smirky smart alecks and provincial rubes, who were shrewd enough to beat the slow, pompous Clintons in the mano-a-mano primaries but who seem like dazed lost lambs in the brave new world of federal legislation and global statesmanship.
Heads should be rolling at the White House for the embarrassing series of flubs that have overshadowed President Obama’s first seven weeks in office and given the scattered, demoralized Republicans a huge boost toward regrouping and resurrection.
The advice he has received certainly hasn’t been the best, and Paglia makes the point eloquently. She primarily goes off on two things that have hurt the administration’s reputation – the “stimulus” bill and the mishandling of the Gordon Brown visit. Both poorly done. And she’s not at all impressed with, nor does she think anyone else has confidence in what she calls “a shrill duo of slick geeks (Timothy Geithner and Peter Orszag) as the administration’s weirdly adolescent spokesmen on economics” .
President Obama — in whom I still have great hope and confidence — has been ill-served by his advisors and staff. Yes, they have all been blindsided and overwhelmed by the crushing demands of the presidency. But I continue to believe in citizen presidents, who must learn by doing, even in a perilous age of terrorism. Though every novice administration makes blunders and bloopers, its modus operandi should not be a conspiratorial reflex cynicism.
Notice another assessment that uses “overwhelmed”. Paglia charitably tries to write it off as something “every novice administrations” goes though. But is it really?
Paglia interestingly uses the Limbaugh kerfuffle as the ultimate case in point of how his staff has let him down. But she notes he wasn’t particularly smart about it either:
This entire fracas was set off by the president himself, who lowered his office by targeting a private citizen by name. Limbaugh had every right to counterattack, which he did with gusto. Why have so many Democrats abandoned the hallowed principle of free speech? Limbaugh, like our own liberal culture hero Lenny Bruce, is a professional commentator who can be as rude and crude as he wants.
Another bit of grumbling is being heard from Howard Fineman. In an article entitled “The Turning Tide“, Fineman notes “Obama still has the approval of the people, but the establishment is beginning to mumble that the president may not have what it takes.”
Not just the establishment -many in the big mushy middle who became enthralled with the cult of Obama without understanding the Obama agenda are now displaying a little buyer’s remorse.
But Fineman’s critique has to do with how the “establishment”, which he contends still holds enormous power, views the Obama presidency to this point. As with most of the elite media, he waves off the popular sentiment which is, for the most part favorable, and essentially claims it is the “establishment” which will make or break this president. By that, of course, he means the elite media, the money men and politicos. However, that said, his assessment is interesting:
They have some reasons to be concerned. I trace them to a central trait of the president’s character: he’s not really an in-your-face guy. By recent standards—and that includes Bill Clinton as well as George Bush—Obama for the most part is seeking to govern from the left, looking to solidify and rely on his own party more than woo Republicans. And yet he is by temperament judicious, even judicial. He’d have made a fine judge. But we don’t need a judge. We need a blunt-spoken coach.
For all his rhetorical skill, that’s something Obama can’t pull off. He comes off as preachy, and with his lack of experience, no one with any sense would accept him as a coach who’s been there, done that and is now helping the rest of us achieve certain results. He just doesn’t have the authority of experience to sell that. And what is going on around him, such as the poorly handled nomination process, makes any attempt by him to assume that role even less authoritative. Even those he does have on board, such as the “shrill duo of slick geeks” as Paglia calls them, do more to hurt his image than help it.
Fineman goes on implicitly giving credibility to the belief that Obama may not be up to the job:
Obama may be mistaking motion for progress, calling signals for a game plan. A busy, industrious overachiever, he likes to check off boxes on a long to-do list. A genial, amenable guy, he likes to appeal to every constituency, or at least not write off any. A beau ideal of Harvard Law, he can’t wait to tackle extra-credit answers on the exam.
In the meantime events pop up and multiply, issues expand and reality barrels on. And the “establishment” is getting antsy. Because what the establishment isn’t seeing from their chosen son is something he’s never had reason or cause to display – leadership. What Fineman dances around with this “beau ideal of Harvard Law” and “blunt coach” characterizations is Obama doesn’t seem to understand the basic tenets of leadership. It has nothing to do with jetting around the country on the perpetual campaign, or excellent but basically empty speeches. It means taking charge of the process and spending less time in Columbus, OH and more time leading Congress and his cabinet heads in the direction he wants to see things go.
Instead he’s essentially turned foreign policy over to Hillary Clinton and his domestic agenda over to a Congress which simply cannot control itself while he and his staff pick rhetorical fights with talk-show hosts.
Fineman lays out a list of things to this point which aren’t playing particularly well among the “establishment”. Again, these are Fineman’s list:
-The $787 billion stimulus, gargantuan as it was, was in fact too small and not aimed clearly enough at only immediate job-creation.
-The $275 billion home-mortgage-refinancing plan, assembled by Treasury Secretary Tim Geithner, is too complex and indirect.
-The president gave up the moral high ground on spending not so much with the “stim” but with the $400 billion supplemental spending bill, larded as it was with 9,000 earmarks.
-The administration is throwing good money after bad in at least two cases—the sinkhole that is Citigroup (there are many healthy banks) and General Motors (they deserve what they get).
-The failure to call for genuine sacrifice on the part of all Americans, despite the rhetorical claim that everyone would have to “give up” something.
-A willingness to give too much leeway to Congress to handle crucial details, from the stim to the vague promise to “reform” medical care without stating what costs could be cut.
-A 2010 budget that tries to do far too much, with way too rosy predictions on future revenues and growth of the economy. This led those who fear we are about to go over Niagara Falls to deride Obama as a paddler who’d rather redesign the canoe.
-A treasury secretary who has been ridiculed on “Saturday Night Live” and compared to Doogie Howser, Barney Fife and Macaulay Culkin in “Home Alone”—and those are the nice ones.
-A seeming paralysis in the face of the banking crisis: unwilling to nationalize banks, yet unable to figure out how to handle toxic assets in another way—by, say, setting up a “bad bank” catch basin.
-A seeming reluctance to seek punishing prosecutions of the malefactors of the last 15 years—and even considering a plea bargain for Bernie Madoff, the poster thief who stole from charities and Nobel laureates and all the grandparents of Boca. Yes, prosecutors are in charge, but the president is entitled—some would say required—to demand harsh justice.
-The president, known for his eloquence and attention to detail, seemingly unwilling or unable to patiently, carefully explain how the world works—or more important, how it failed. Using FDR’s fireside chats as a model, Obama needs to explain the banking system in laymen’s terms. An ongoing seminar would be great.
-Obama is no socialist, but critics argue that now is not the time for costly, upfront spending on social engineering in health care, energy or education.
Of course on the other side of these points are those that argue that the stimulus bill was poorly designed and will do nothing to stimulate the economy while ballooning the debt and inviting hyper-inflation as a result. They’d also argue that $275 home-mortgage-bailout rewards bad behavior and that when Obama claimed the pork laden, 9,000 earmark omnibus spending bill was the “last administration’s business” he gave up any hope of being in the same county as the “moral high ground”. Etc., etc.
In essence, the first fifty days can be summed up fairly easily in three words: lack of leadership. And leadership ability isn’t something the tooth fairy delivers one night along with the quarter for your tooth. That is what has the “establishment” mumbling in their martinis.
I had to laugh, however, at how Fineman ended his piece:
Other than all that, in the eyes of the big shots, he is doing fine. The American people remain on his side, but he has to be careful that the gathering judgment of the Bigs doesn’t trickle down to the rest of us.
Talk about “side-steppin'” and damning with faint praise.
But I have to wonder if Fineman’s title, “The Turning Tide” isn’t somewhat of a threat to the Obama administration if it doesn’t get its act together and do so quickly. As in-the-tank as the media was for Obama, they’re now realizing that it was their credibility they sold short if he isn’t successful. But there is only so much, in this era of the new media, they can do to spin what is happening positively. Fineman is issuing a warning of sorts – we can do this for a little while longer, but at some point it is going to turn, and it won’t be pretty.
The narrative that is now building is one of an administration overwhelmed, still in a campaign mode and rudderless. It began with the UK’s Telegraph last week and it seems to be gaining momentum. Unless Obama and the administration can do some pretty fancy work over the next 50 days, he may emerge from his first 100 days with that being the conventional wisdom. If so, he’s going to have a long 4 years ahead of him.
UPDATE: Interesting Gallup Poll – totally average: